Nonprofit hospital outlook negative as COVID-19 restricts cash flow, Moody's says

Morgan Haefner - Print  | 

Moody's Investor Services changed its outlook for nonprofit hospitals from stable to negative because of how the coronavirus outbreak is expected to affect cash flow.

Four things to know:

1. While Moody's previously expected 2-3 percent growth in cash flow for 2020, this is no longer the case. Moody's said the coronavirus situation is changing too quickly to estimate a specific range for this year, but nonprofit hospitals will likely see lower cash flow compared to 2019.

2. Moody's said nonprofit hospitals will take a revenue hit as they cancel lucrative elective surgeries and procedures to prepare for a surge in COVID-19 patients. 

3. Revenue declines will be paired with higher expenses as the need for equipment and supplies increases. 

4. Moody's predicts the containment of the outbreak will come in 2020, and the economy will start to gradually recover. Still, analysts note there is a high degree of uncertainty and a risk that the outbreak could last longer than predicted.

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